The Sri Lankan Crisis

The recent political and economic crisis in Sri Lanka had attracted quite a bit of attention from the analysts, academia, and media alike. Various hypotheses and questions have been put forward in popular parlance. Has Sri Lanka lived beyond its means and taken its social welfare measures (freebies, acc­ording to some views) beyond the logical extreme? Or, is it in line with the prediction of political instability and civil unrest in emerging economies following the COVID-19 pandemic and the Russian invasion of Ukraine in early 2022 (United Nations 2022; World Bank 2022)? Or, are there some deep stru­ctural issues that have remained unaddressed for long that precipitated this crisis?

The causes of the immediate crisis in the island nation seem clear. The coll­apse of tourism caused by travel restrictions, the consequent draining out of foreign reserves, and rising food and ­energy costs caused by the Ukraine conflict seem to have led to an economic collapse. Food and fuel scarcities forced the citizens of the country out on the streets to remove what they felt was an ineffectual and corrupt government. Prime Minister Mahinda Rajapaksa was forced to resign on 9 May 2022, and his brother Gotabaya Rajapaksa, who was the President, fled the country on 13 July 2022, and resigned from his position the next day. As we write, there does not seem to be much light at the end of a dark tunnel for the newly appointed President Ranil Wickremesinghe, who was sworn in on 21 July 2022.